Effective as of January 1, 2005
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Qualified Plan. In addition, the following capitalized terms used herein shall have the meanings ascribed to them in this Article I.
The purposes of the Plan are (a) to permit Participants whose benefit accruals under the Qualified Plan would be limited in the ordinary course by the Statutory Limits to defer the receipt of compensation under an arrangement that will credit hypothetical investment results to such deferrals at rates determined by the rate of investment returns based on the Participants selection from among investment funds available under the Qualified Plan (other than gains or losses attributable to the Hexcel Stock Fund); and (b) to provide a vehicle under which Participating Employers may supplement Deferrals made by Participants with matching or other forms of Company Contributions. The Plan is intended to be an unfunded and nonqualified deferred compensation arrangement providing deferred compensation to a select group of management or other highly compensated employees of the Employers, within the meaning of that phrase as used in Sections 201(2), 301(a)(3), and 401(a)(1) of the Act, and to defer until actual receipt the point at which each Participants Accrued Benefit is includable in gross income under the Code, and the Plan will be construed and operated only in conformity with the foregoing statement of intention.
Each Participant shall be eligible to accrue a benefit under the Plan for a Plan Year only if:
To be eligible to accrue a benefit under the Plan during any Plan Year (including an accrual based on Deferrals), an Eligible Employee who has been designated and approved as a Participant under Section 2.2(c) must file a written application with the Committee no later than the 15th day preceding the beginning of such Plan Year. Any electronic enrollment process will be considered to constitute a written application for purposes of this Section 2.3, if under applicable law the process is sufficient to result in a valid and binding waiver of any claim to payment of
Compensation thereby deferred. The Committee shall notify Eligible Employees of their prospective eligibility to participate in the Plan at least 60 days prior to the beginning of each Plan Year, provided, however, that with respect to the Plan Year beginning on January 1, 2005, the Committee shall notify Eligible Employees of their prospective eligibility and shall permit the filing of an application as soon as administratively convenient after the adoption of the Plan, but in all events prior to January 1, 2005.
The Committee, in its sole discretion, may permit the filing of an application later than the 15th day preceding the beginning of a Plan Year, in the case of a person who will become a Participant for the first time during such Plan Year, provided, however, that no application to participate shall be accepted after the 30th day following the date on which such person first meets all the eligibility requirements to participate for such Plan Year (other than the filing of the application itself), and provided further that no such application shall result in the deferral of any income other than prospectively.
The application for participation in the Plan shall signify (and shall be deemed to be) the Eligible Employees acceptance of the terms of the Plan.
Except as otherwise provided herein with respect to Deferrals to be made from Performance Compensation, the application for participation in the Plan shall signify (and shall be deemed to be) the Eligible Employees election to defer under this Plan the portion of his or her Compensation (exclusive of Performance Compensation) otherwise payable during the Plan Year determined by multiplying the Participants Target Deferral Percentage by the portion of his or her Compensation (exclusive of Performance Compensation) that is in excess of his or her Deferral Starting Amount. The reduction in the Participants salary or other compensation authorized by the election made pursuant to this paragraph of Section 2.3 will be made as nearly as practicably possible on the same schedule as continued Pre-Tax Contributions would have been made if the Statutory Limits did not apply and the Participants Target Deferral Percentage were unchanged through the Plan Year.
If so provided by the Committee, the Participating Employer, and the Participant, the application for participation in the Plan may include an election by the Eligible Employees to defer under this Plan an additional portion of his or her Compensation (exclusive of Performance Compensation) in excess of the amount to be deferred pursuant to the immediately preceding paragraph.
Deferrals may be made from Performance Compensation, provided, however, that anything to the contrary in this Plan notwithstanding, an election to defer the receipt of Performance Compensation will be ineffective for any purpose whatsoever under this Plan, unless such election is made on or before the deadline established for deferrals of such income pursuant to Code Section 409A(a)(4)(B)(iii) in order for such deferrals not to be included in gross income pursuant to Code Section 409A(a)(1).
The application for participation in the Plan shall signify (and shall be deemed to be) the Eligible Employees agreement that the Deferrals he or she elects shall reduce the amount of salary and other compensation he or she will receive for the Plan Year in the manner and on the schedule prescribed under this Plan.
Each Participant shall accrue a benefit for a Plan Year in the form of a credit to his or her Deferral Account equal to the amount of his or her Compensation for the Plan Year deferred pursuant to the Participants elections under Section 2.3.
If the amount credited to the account of a Participant under the Qualified Plan for a Plan Year is reduced after the close of such Plan Year as a corrective action deemed necessary by the Administrator of the Qualified Plan to satisfy a Statutory Limit, no corresponding credit shall be made under this Plan.
Each Participant may be eligible to accrue a benefit under the Plan in the form of a Nonqualified Matching Contribution for a Plan Year only in accordance with this Section 2.5.
Each Participant may be eligible to accrue a benefit under the Plan in the form of a Nonqualified Basic Profit-Sharing Contribution and a Nonqualified Special Additional Profit-Sharing Contribution, and/or a Nonqualified Discertionary Profit-Sharing Contribution, for a Plan Year only in accordance with this Section 2.6.
(i) A Nonqualified Basic Profit-Sharing Contribution and a Nonqualified Special Additional Profit-Sharing Contribution in an amount equal to the Participants Excess Compensation multiplied by the sum of the percentages used under the Qualified Plan to determine the Participants Basic Profit-Sharing Contribution and (if applicable) his or her Special Additional Profit-Sharing Contribution;
(ii) A Nonqualified Discretionary Profit-Sharing Contribution in an amount equal to the Participants Excess Compensation multiplied by the percentage (if any) used under the Qualified Plan to determine the Participants Discretionary Profit-Sharing Contribution.
The Company shall establish and maintain procedures necessary and appropriate to cause amounts to be withheld from each Participants normal payroll payments in respect of Deferrals, and shall effect such withholding in a manner, and at such times, consistent with the purposes of the Plan.
The right of a Participant under Section 2.9 to payment of his or her Accrued Benefit shall not be subject to forfeiture. Nothing in this Plan shall be construed to prohibit any amendment or action of the Committee that prospectively affects or could affect the crediting of investment returns on Accounts.
No additional benefits will accrue under the Plan in the event of the termination of the Qualified Plan or the Plan.
A Participant may select one or more Beneficiaries by filing with the Committee a written designation of such Beneficiaries on such forms as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no Beneficiary survives the Participant, the Qualified Plan Beneficiary shall be the Beneficiary, or if no Qualified Plan Beneficiary survives, the executor or administrator of the Participants estate shall be deemed to be the Beneficiary. Notwithstanding the foregoing, a married Participants initial designation and/or any subsequent change in Beneficiary designation to someone other than or in addition to his or her Eligible Spouse shall not be effective unless the Eligible Spouse consents in writing to such designation. The Committee shall have the authority to establish from time to time additional rules and procedures with respect to the designation of Beneficiaries hereunder.
This Section 2.12 shall be in effect only after the Secretary of the Treasury has issued the regulations referred to in Section 409A(a)(2)(B)(ii)(II) of the Code. For purposes of this Section 2.13, regulations means only temporary or final regulations, or (to the extent a taxpayer is entitled to reliance thereon under the Code), proposed regulations.
Upon application to the Committee, providing such information and provided in such form and manner as the Committee shall require, a Participant may receive a distribution of such portion of the Participants Accrued Benefit in the event of an Unforeseeable Emergency (as such term is defined below) as is provided in this Section 2.12, at such time or times as the Committee may determine in the exercise of its sole and absolute discretion. The term Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participants spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participants property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. In no event may the amounts distributed with respect to an Unforeseeable Emergency exceed the amounts necessary to satisfy such emergency (plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution), after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participants assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). Notwithstanding any provision in the Plan to the contrary, any payment made pursuant to this Section 2.12 shall comply with Section 409A(a)(2)(A)(vi) of the Code and the regulations (or similar guidance) promulgated thereunder (or any successor provisions).
This Section 2.13 shall be in effect only after the Secretary of the Treasury has issued guidance specifying the extent to which a distribution may be made in the event of a change in control as defined in Section 409A(a)(2)(A)(v) of the Code. For purposes of this Section 2.13, guidance means only final regulations, revenue rulings, or other written rules of general applicability on which a taxpayer is entitled to reliance under the Code.
In the event of a Change in Control, as hereafter defined, a Participants Accrued Benefit shall be distributed as a Change in Control Distribution, unless sooner distributed pursuant to Section 2.9 or postponed pursuant to this Section 2.13. For purposes of this Plan, a Change in Control means a change in the ownership or effective control of the Company or a change of ownership of a substantial portion of its assets that is sufficient to satisfy the regulatory criteria for the change to be a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, as described in Section 409A(a)(2)(A)(v) of the Code.
Unless postponed as hereinafter provided, a Change in Control Distribution shall be made in the form and at the time determined by applying Section 2.9 as if the Participant had separated from service twelve months following the Change in Control.
To the extent permitted in any applicable guidance, a Participant who will otherwise become entitled to a Change in Control Distribution may irrevocably waive such distribution in a writing provided to the Committee at least twelve months prior to the first date on which such distribution would be payable, and receive in lieu of the Change in Control Distribution a distribution in the form and at the time determined pursuant to Section 2.9.
ADJUSTMENTS TO ACCOUNT BALANCES
A credit equal to the dollar amount of a Deferral shall be made to the Account of the Participant making the Deferral as soon as administratively practicable after the date of the reduction of the Participants salary to which such Deferral corresponds.
A credit equal to the dollar amount of a Nonqualified Matching Contribution shall be made to the Account of the Participant with respect to whom the Nonqualified Matching Contribution is made, as of the date a corresponding Matching Contribution would have been allocated to the Company Matching Account of the Participant had the Nonqualified Matching Contribution been a Matching Contribution of a like kind (i.e.,, Matching Fixed Contribution, Matching Discretionary Contribution, or Rule of 45 Matching Contribution) under the Qualified Plan.
A credit equal to the dollar amount of a Nonqualified Profit-Sharing Contribution shall be made to the Account of the Participant with respect to whom the Nonqualified Profit-Sharing Contribution is made, as of the date a corresponding Profit-Sharing Contribution would have been allocated to the Profit-Sharing Account of the Participant had the Nonqualified Profit-Sharing Contribution been a Profit-Sharing Contribution of a like kind (i.e.,, Employer Basic Contribution, the Discretionary Profit-Sharing Contribution, or the Special Additional Employer Contribution) under the Qualified Plan.
The Accounts of a Participant shall be debited in the amount of each payment made pursuant to Section 2.9 to such Participant or to any Beneficiary of such Participant, as of the close of business on the day as of which such payment is made.
The Company shall establish a trust and make contributions to such trust, in such amounts and at such times as the Company, in its discretion, deems appropriate in order to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan. Such trust will be intended to constitute a grantor trust, of which the Company is the grantor, within the meaning of Section 671 of the Code. The income tax imposed on the Company with respect to any income earned by the trust shall be paid by the Company and shall not be a charge against the Participants Accounts. The trustee of such trust shall make payments to Participants and their beneficiaries in such manner and at such time as specified in the Plan and the agreement governing such trust. The trust assets shall be subject to the claims of the Companys creditor in the event of the Companys insolvency or bankruptcy, pursuant to the terms of such trust agreement. The Company intends that such trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees of the Company.
The Committee shall administer the Participants Accounts and any of the Companys funds invested in the trust in connection therewith. Payment of benefits from the trust shall, to that extent, discharge the Companys obligations under the Plan.
Each Participant shall elect that amounts credited to his or her Accounts be adjusted for gains or losses (realized or unrealized) and for dividend and other income, as such gains, losses, dividends, and income are reported to the trustee, as if invested in one or more investment funds which shall be designated for such purpose from time to time, in accordance with such rules and procedures as may be prescribed by the Committee or the trustee. Anything to the contrary in this Plan notwithstanding, the Company shall be under no obligation to direct the trustee of the trust to follow investment elections of any Participant.
Notwithstanding the existence of any such trust or other vehicle, it is expressly understood that neither the Participant nor his or her Beneficiaries shall have any present or future interest in the assets of the trust, which, together with the dividend and interest income thereon and any capital gains realized with respect thereto, shall constitute assets of the Company. It is further understood that the Plan does not create any fund or trust for the benefit of the Participants or their Beneficiaries, that the Companys obligation hereunder is limited to the contractual obligation to make payments to the Participant or to his or her Beneficiaries as provided herein, and that with respect to such payments the rights of the Participant or his or her Beneficiaries shall be no greater than those of an unsecured creditor of the Company.
The Company shall have full and complete authority in good faith to correct the amount of any credit to the Account of a Participant arising from any mistake (whether of law or of fact), notwithstanding any claim of reliance on the mistaken entry by any person (including, without limitation, the Participant and any Beneficiary) and without regard to whether any such mistake is alleged to have resulted from negligence, gross negligence, reckless or willful conduct, or conduct amounting in substance to any one of the foregoing, provided, however, that nothing herein will be interpreted or applied in such a manner as to cause any amount deferred under this Plan to be included in gross income pursuant to Section 409A(a)(1) of the Code.
The Company may, in its sole discretion, terminate, suspend, or amend the Plan at any time or from time to time, in whole or in part; provided, however, that no amendment, suspension, or termination of the Plan shall, without the consent of a Participant, affect the amounts credited to the Participants Accounts prior to such termination, suspension, or amendment of the Plan.
Nothing contained herein will confer on any Participant the right to become or to be retained as an employee of the Company, an Affiliated Employer, or an Unaffiliated Employer.
A Participant, retired Participant, surviving spouse, or beneficiary may not, either voluntarily or involuntarily, assign, anticipate, alienate, commute, pledge, or encumber any benefits to which he or she is or may become entitled under the Plan, nor may the same be subject to attachment or garnishment by any creditors claim or to legal process.
The Committee shall have full discretionary authority to determine eligibility and to construe and interpret the terms of the Plan, including the power to remedy possible ambiguities, inconsistencies, or omissions.
The Plan shall be governed by the laws of the State of Delaware, except to the extent superseded by federal law.
The singular, where appearing in the Plan, will be deemed to include the plural, unless the context clearly indicates the contrary, and the masculine, where appearing in the Plan, will be deemed to include the feminine.
If the Company acts in writing to cause Section 2.5 or Section 2.6 to apply with respect to Participants employed by the Company, or to suspend or modify the application of Section 2.5 or Section 2.6 to such Participants, each Affiliated Employer will be deemed to have taken the identical action with respect to Participants employed by it unless, within 10 days of such action by the Company, the Affiliated Employer has delivered a written notice to the contrary to the Committee.
If the Company acts to terminate, suspend, or amend the Plan, each Affiliated Employer will be deemed to have taken the identical action with respect to Participants employed by it unless, within 10 days of such action by the Company, the Affiliated Employer has delivered a written notice to the contrary to the Committee.